We’re in a “Rivalry That Could Go Hot”


Last week, I spoke with China policy expert Elbridge Colby about Taiwan’s critical role in US national security.

The thought of risking American lives and resources over a little island off mainland China leaves most Americans perplexed. That is understandable. But the goal for the US here, which Colby and I agree on, is to avoid taking those risks—to avoid a war. That’s why he says we urgently need to overhaul our defense strategy. And he lays out a cogent plan for doing so in this week’s Global Macro Update interview. (Click the image below to watch now.)

https://youtu.be/I4IJACh_6VY

Here’s Colby on the stakes:

[T]he best thing for the American people, and frankly the best thing for freedom and democracy in the world, is for us to not get in a war, but meet our core interests. And I honestly just am flabbergasted that we continue to go… it's like we're a major company running a self-defeating strategy playbook, and we just continue with it. …

And I really don't want a war because I think a war with China would be, at minimum, very destructive and kill a lot of people, but it could be much worse. When you go back and look historically at what happens with wars, not only were millions and millions of young men killed in the First World War in the most brutal way imaginable, but then it creates Nazism and communism or fosters and enables them. And then you have multiple follow-on problems that last for generations.

This passionate stance comes from a long tenure in the Defense Department, where Colby served as the US Deputy Assistant Secretary of Defense for Strategy and Force Development from 2017 to 2018. Today, he’s a Principal at the Marathon Initiative, as well as an author.

A direct military conflict with China has massive market implications investors should watch. One example… Colby thinks that if China takes total control of Taiwan, it would be in our best interest to “disable” TSMC, despite the economic avalanche that it would trigger. He said, “The only thing worse than that is if a hegemonic China controls TSMC.”

On a more positive note, improving national security may create powerful investment opportunities in the defense space (something I’m monitoring with the Macro Team).

In the interview, you will also hear:

  • Whose diplomatic model the US should follow with China

  • Why US security doesn’t need to equal a diminished China

  • The crucial differences between our relationship with China and US-Soviet relations during the Cold War

A full transcript of our conversation is available here.

Best regards,


Ed D’Agostino
Publisher & COO

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If you prefer to listen to Global Macro Update, you can do so here:


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